Bone morphogenetic proteins (BMPs) represent the largest subset of the TGFbeta family of growth factors, with actions that range from osteomorphogenesis to ventralization of mesoderm during early development. The mechanisms by which BMPs exert such diverse effects and tissue-specificity are poorly understood. The long-term objective of this proposal is to understand molecular mechanisms by which BMPs are able to generate specific gene expression events by exploring spatial and temporal effects of BMPs. We recently cloned a novel transcription factor for BMP-mediated genes, called OAZ. Preliminary data support that OAZ regulates different genes by distinct protein interactions with at least two partners, Smads1/4 or Olf-1/EBF. The specific hypothesis to be tested is that OAZ interactions with such distinct proteins leads to assembly of unique transcriptional complexes and differential gene regulation. New results show that OAZ activates the Smad6 gene, a well-recognized antagonist of BMP signaling, supporting a potential novel negative feedback loop for BMP signaling via OAZ. In Specific Aim 1, we will test this by (a) confirming the sequence element in the mouse Smad6 promoter to which OAZ binds, (b) examining the functional significance of Smad6 induction by OAZ with time-course studies of Smad1 activation by BMPs and wild type or dominant negative OAZ expression, and (c) identifying novel mammalian target genes for OAZ. We have identified two novel cofactors of OAZ, Asc-1/TRIP4 and Parp1 in yeast two-hybrid screens using OAZ as a bait. In Specific Aim 2, we will study the functional significance of the OAZ-Asc-1 complex by (a) elucidating a physiological role of Asc-1 in activation of Xvent-2 by inhibiting Asc-1 expression by overexpression of antisense-Asc-1 construct, (b) determining the functional role of Asc-1 as a transcription partner of OAZ, and (c) characterizing whether the OAZ-Asc-1 complex assembles on known BMP target gene promoters (Smad6, Msx-1, Msx-2, and Id1). Finally, in Specific Aim 3, we will study a physiological role of poly (ADP-ribose) polymerase, Parp1, as a cofactor of OAZ by studying (a) the mechanism by which Parp1-mediated poly-ADP-ribosylation positively regulates transcription of Xvent-2 gene, (b) whether or not known proteins of the OAZ transcriptional complex (OAZ, Smads, and/or Asc-1) are poly-ADP-ribosylated by Parp1, and (c) whether Parp1 is involved in the regulation of known BMP target gene promoters (Smad6, Msx-1, Msx-2, and Id1). These studies should provide important insights into TGFbeta-mediated regulation of gene expression, which is of direct relevance to both normal physiology and a variety of disease states.